Since early March, the Detroit Newspaper Guild has been in negotiations with 21st CMH Acquisition Co., the Alden Global Capital unit that received approval last week to buy Journal Register Co.’s assets out of bankruptcy.

Louis Mleczko, president of the Newspaper Guild of Detroit, which represents employees at the Macomb Daily and the Daily Tribune, said the employment terms are outrageous. He said Macomb Daily employees took a pension freeze and a 12.5% pay cut four years ago and have gotten just 2.5% back.

“They took tremendous sacrifice to help keep this entity afloat, but now (the company) decided to take on the unions and get rid of them and gut their contracts,” Mleczko said.

The contracts expires March 31. Workers have authorized a possible strike or other labor action once the contracts end.

IN A MARCH 1 story on Poynter.org, Mich. unions say JRC has “declared war,” threaten strike, Andrew Beaujon writes the Metropolitan Council of Newspaper Unions is warning its members of union-busting tactics being employed by Journal Register Company and the Alden Global Capital subsidiary, 21st CMH Acquisition Co., that plans to “purchase” the company in bankruptcy proceedings.

1. On February 22, JRC gave notice to all the unions at the Macomb Daily and Daily Tribune that it was terminating all collective bargaining agreements. The termination of contracts would be effective March 31. JRC is doing this because it claims it will no longer be the employer when 21st CMH becomes the owner of the newspapers on April 17.

2. JRC has refused to live up the successor clauses in the collective bargaining agreements. It has refused to require its purchaser, 21st CMH, to accept the current union agreements.

3. In Philadelphia and New York, 21st CMH proposed union-busting contracts. It proposed contracts that eliminate all protections regarding work jurisdiction, subcontracting and outsourcing. Those proposed contracts give 21st CMH management the right to change terms and conditions of employment at any time – insurance, work schedules, compensation, etc.

4. When the Philadelphia and New York unions would not to agree to the union-busting contracts, 21st CMH sent letters to JRC employees telling them they could apply for their own jobs when 21st CMH becomes the employer. 21st CMH would selectively hire some employees. The new terms of employment by 21st CMH, according to the letters, include:

An employee at one of the Michigan papers commented on the Denver Newspaper Guild site that some workers aren’t waiting around to see how this all plays out:

As an employee in the Michigan Cluster it is very unfair to us to be on pins and needles and when questions are asked we get answers read from a script. They need to tell us if we are going to have jobs, be considered for jobs, something so we know. Most are being very proactive in searching for another job right now.

In a related story, three Philadelphia units of the Newspaper Guild voted to accept a “final offer” from 21st CMH.

“Our members voted this up resoundingly, but they also were told take it or leave it,” [Newspaper] Guild President Bernie Lunzer said. “This new ownership which is really the old owners reconstituted – sent letters warning all workers that they would be fired when the sale is complete and would have to reapply for their jobs, and would have their pay cut.”

Things with the Journal Register Co. bankruptcy are starting to move fast, so stay tuned.

IT APPEARS THE Journal Register Company bankruptcy plan hit a snag last week at the 11th hour. Law360 reported that newspaper unions involved in the process, as well as the Communications Workers of America, have objected to the sale of Journal Register Co. to the stalking horse bidder that is a subsidiary of Alden Global Capital, 21st CMH Acquisition. A hearing on the sale had been scheduled for Feb. 21.

“While we know we won’t walk away with the status quo, we make it clear that our members, their workers, will be treated with dignity and respect,” he said. “The Journal Register Co. is showing no such respect, not for its workers and not for the bankruptcy process itself, which certainly was never intended to be a get-out-of-jail-free card for businesses facing some financial trouble every couple of years.”

The process that JRC is going through “is quite common in bankruptcy proceedings,” John Collard, chairman of Strategic Management Partners, an Annapolis, Md.-based business turnaround firm, tells The New Haven Register.

“When somebody buys a company out of bankruptcy, they are buying a specific list of assets, usually not 100 percent of what the existing business has,” Mr. Collard tells the newspaper. “While they can purchase assets, it’s not possible to purchase employees. So the acquiring company comes to employees and offers them the same terms they had with the old company or different terms.”

He says it’s likely that 21st CMH Acquisition Co. will not retain all of the Journal Register employees.

“The notices sent to all Journal Register Company employees – from part-time staffers to managers to the executive team – are the next step in the Company’s ongoing sale process. Journal Register Company’s leadership team cannot speak on behalf of the new owner but has continually expressed to the purchaser that a competent and competitive workforce is critical to the company’s success moving forward,” Jonathan Cooper, vice president for media relations and employee communication at Digital First Media, said. Digital First Media currently operates Journal Register Company and other media companies.

IN CASE YOU missed it, The Denver Post released a really nice iPad edition of the Ski Guide that got a good review from Talking New Media, which calls it “by far the best thing I’ve seen out of MediaNews Group or the Journal Register Company.”

And for those who don’t have in iPad, the post has a video of the app in action — did I already say it’s really nice?

And bear in mind that outsourcing and layoffs were written into the contract recently ratified by the Non-Newsroom Unit. From a July 27 post:

In order to reach agreement on the full contract, The Post continues to insist that any agreement must include the amount of savings from the circulation call centers that they can achieve by sending that work to Honduras. After months of trying to negotiate an agreement that would keep the call center work at the Post, but reduce costs enough to be competitive with a Central American call center, it has become clear that the math just will not work. So the union presented a proposal accepting the outsourcing of the call center work in exchange for additional compensation and benefits for those who will be displaced but will continue working until their job is eliminated, increased compensation for call center employees who are retained and a timeline for the transition of work to Honduras. Most of the details have been tentatively agreed to. The timeline and a few benefits issues are not yet resolved.

The outsourcing likely will result in the elimination of more than 30 local call center employees’ jobs, leaving two full-time employees and five part-time employees.

Rick Edmonds on Poynter: “Journal Register likely to reduce print to three days a week at some papers,” Sept. 20, 2012.

The new slimmed-down Journal Register company, being pieced together in a bankruptcy proceeding, is likely to reduce print frequency at several of its 20 dailies.

“I would consider and am considering a reduction in print frequency in some markets — (which ones) to be determined,” CEO John Paton wrote me in an e-mail interview earlier this week. “I think it makes sense to think about the frequency of print as print revenues decline and digital revenues increase.”

>snip<

Paton declined to discuss what miscalculations in a bankruptcy plan three years ago, under different management, left the company with too much debt to carry again so soon. He also said it would be wrong to assume the same issues are creating an equal financial problem at MediaNews Group, the much larger chain controlled by Alden and managed by Paton’s Digital First company for just over a year.

By summertime, however, our source reported grumbling over what was perceived as top-heaviness at Digital First Media, with new senior executive hires during a time of layoffs at MediaNews Group papers around the country. The fear: MediaNews Group was being used as a cash cow to build up DFM. Our source also noted tension between MediaNews Group types and folks imported by Paton, many of them with Journal Register Company roots.

If there is a poster child for the “digital first” newspaper movement, it is probably Journal Register Co., which manages a chain of dailies and weeklies in the eastern U.S. John Paton took the helm as CEO after it emerged from bankruptcy in 2009, and implemented a wide range of digital-first moves — and yet parent company Digital First Media just announced that Journal Register Co. is filing for bankruptcy for a second time. The not-so-hidden message in all this is that despite all the pain of the last few years, the restructuring of newspapers isn’t even close to being over: as we’ve seen with the large structural changes in the steel industry, car makers and the airline market, transforming an industry with massive legacy costs is a long and bloody process. What emerges at the end remains to be seen.

The reason we don’t know more about the numbers is that JRC, as a closely held company, releases financial information only selectively—in sharp contrast to its “open journalism” philosophy.

>snip<

Paton, for instance, has repeatedly said digital revenues at JRC were up some large percentage since he took over. He does so again in his bankruptcy note. Yes, but from what to what? Those are big numbers all right, but 235 percent of not much is still not that much, and its worth noting that JRC’s digital revenues were far below industry average when Paton took over. It’s much easier to grow fast off a low base, and Paton has used the company’s privately held status to cherry pick positive numbers without having to paint a full picture—one that definitely didn’t include an imminent bankruptcy.

From RACHEL JACKSON, former Journal Register employee: The [Journal Register] Chapter 11/sale announcement does not surprise me in the least – and the employee you quoted as calling this “horseshit” is exactly right.

In an in-depth analysis of the possible implications of Journal Register Company’s bankruptcy filing, Langeveld writes that while Alden Global Capital’s initial strategy seemed to be one of consolidation, the hedge fund might have changed its mind — it has shed around half of its newspaper holdings in the past year.

Last year in July, I estimated Alden’s total media investments to be about $750 million. Today, after the various sales and counting JRC’s value as zero, those holdings are probably down to about $300 million, and it seems clear that Alden would just as soon get out completely — at least from newspapers.

From John E. McIntyre’s “You Don’t Say” column in the Baltimore Sun, May 23, 2012:

Gregory Moore, the editor of the Denver Post, is, I believe, a good man grappling with a difficult challenge. The Post, as described in an article at Poynter.org by Steve Myers, is essentially eliminating its copy desk. Eleven are going or gone, a couple have been reassigned to other duties, and the nine survivors become assistant editors assigned to the various newsroom departments.

When explanations of these and similar changes are made, there is talk of moving away from “assembly-line editing” and “outmoded nineteenth-century industrial processes” to some bold, modern, fresh, immediate journalism that removes all those unnecessary “touches” between the writer and the reader.

This is, of course, cant. The brutal facts are these: Terrified by declines in revenue, newspapers are shedding employees to save money. They are attempting to keep as many reporters as possible to generate content, and they are gambling that you will tolerate shoddier work.

Union

Check out The Grapevine

The Grapevine is a random collection of stories about MediaNews Group and Digital First gathered from around the Internet. There is no rhyme or reason to its organization; when I find something of interest, I’ll post it. These juicy bits will be categorized under The Grapevine. Feel free to add to The Grapevine by posting links in the comment section or emailing me at hamm.kevin@gmail.com.